Small producers ask for support in UK budget

19th February, 2020 by Melita Kiely

“Frustrated” wine and spirits businesses in the UK have written a joint letter to the chancellor of the exchequer calling for a 2% duty cut in next month’s budget.

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Wine and spirits producers are asking the UK government to cut alcohol duty by 2% in next month’s budget

A total of 16 small and medium-sized enterprises (SMEs), who are part of the Wine and Spirit Trade Association (WSTA), have called on chancellor Rishi Sunak MP to cut wine and spirits duty by 2% to give businesses a boost.

The group highlighted the “significant pressures” that would be placed on wine and spirits producers in the UK if the proposed 2.2% duty rise is introduced in next month’s budget, which will be announced on 11 March.

In 2018-2019, gin and vodka producers in the UK paid 52% of all spirits duty receipts collected across the EU.

The later warned that “this significant tax burden is damaging enterprise”.

Miles Beale, chief executive of the WSTA, said: “This budget comes at a crucial time when the trade is facing upheaval as the new trading landscape unfolds. By cutting wine and spirits duty the chancellor would be allowing British business to invest and grow.

“Duty rises are bad for consumers, bad for British SMEs – which are the backbone of this successful British industry – and also bad for the exchequer, as the government’s latest figures clearly show. After wine was singled out for a duty rise wine revenues have fallen on the previous year, in line with a slump in wine sales.

“If government chooses to increase what are already some of the world’s highest alcohol tax rates, it will not only push up prices for people who voted them in, but will also hit hard an SME-heavy industry that prides itself on flying the flag for brand Britain.”

In 2018, the UK government chose to freeze spirits duty. According to the government’s recent Alcohol Duty Bulletin, in the last six months since the duty freeze, revenue income from spirits was up 1.7%.

The WSTA believes a reduction in UK wine and spirits duty would save the UK economy thousands of pounds.

Karl Mason, founder and director of Masons Yorkshire Gin, said: “To allow us to further invest and grow we urge the new chancellor to cut our excessively high duty rates at the budget next month.”

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